Mission Bay Real Estate Took a Massive Hit During COVID: Will It Make a Comeback?

About the Author

Deniz Kahramaner is a Realtor and the Founder of the only data-driven real estate team in the Bay Area, Atlasa.

If you’d like helping buying your next home or selling your home, please feel free to reach out to Deniz at deniz@atlasa.com

The TLDR

Mission Bay is known for its beautiful newly developed high rises, the nearby Chase Center development and being classified as the “future” of San Francisco.

Coincidentally, Mission Bay took the largest price hit among any neighborhood during COVID-19. In this article, we look at how real estate prices were impacted due to the Coronavirus, and what we expect will happen to prices in 2021 and 2022.

How Did Mission Bay Real Estate Perform Compared to Other Neighborhoods During COVID-19?

We looked at how different neighborhoods performed before and after COVID-19. There was a striking conclusion: Mission Bay condo prices dropped by as much as 20%, while other more residential neighborhoods saw much smaller price drops due to the Coronavirus pandemic.

Why Was Mission Bay Hurt More Than Other Neighborhoods?

High rises and metropolitan condos in San Francisco have very specific attributes that make them very desirable to technology employees:

• Amenities like pools, gyms, rooftop terraces, common areas.
• Newer high end fit and finish.
• Doormen or security systems that keep the building secure and handle online delivery packages.
• Proximity to large technology company headquarters.

In order to maintain these amenities, most condos in Mission Bay have high HOA fees, ranging from $500 to above $1,000 per month.

As soon as COVID-19 started, most of these amenities such as gyms and pools were shut down, but the high monthly HOA fees stayed the same. Furthermore, all of the technology offices close to this high-rise buildings were all shut down to employees. This suddenly made high-rise condos very undesirable during the pandemic.

Furthermore, Mission Bay has a very large number of condo owners who rent their condo out to tenants. As soon as COVID-19’s lockdowns started, San Francisco had an exodus of young technology employee renters. This exodus forced many Mission Bay condo owners to flood the market with their units, which softened condo prices throughout the neighborhood.

The below analysis shows that historically, higher HOA fees in Mission Bay have not affected home prices. Home buyers are perfectly fine paying high monthly dues as long as they get great amenities.

However, if some or all of the high end amenities are shut down, recurring monthly fees have been hard to stomach for some buyers, which was reflected in the price reductions during COVID-19.

What is in Store for Mission Bay in Q2 2021 and Beyond?

Our team is a big fan of using historical data to make inferences about the future, in addition to other data sources that can inform the future.

Let’s start by looking at historical real estate data.

As can be seen, Mission Bay’s prices saw a meteoric rise between 2010 and 2019. In 2020, after the COVID-19 pandemic, prices plummeted down to 2017 levels as can be seen in the graph below.

When we dive into Mission Bay condo prices in a more granular fashion, we see that the “price bottom” was in October-December of 2020, when COVID-19’s uncertainty was coupled with the uncertainty of the election season. Most buyers were scared to buy in Q4 of 2020.

This trend entirely changed starting in Q1 of 2021, and Mission Bay started its steady price recovery.
Furthermore, our analysis strongly indicates that venture capital funding, the fundamental driver of future tech growth in the Bay Area, has not left the Bay Area.

Mission Bay’s Inevitable Comeback

Days on market tends to be a leading indicator that a condo market will make a comeback.

2020 was a tough year for Mission Bay condos. Most properties sat on the market for more than 50 days.

We see a very distinct decrease in how long it takes for new listings to sell in Mission Bay. This has always been a strong indicator that a neighborhood will start to rapidly appreciate.

2021 will be a great year for Mission Bay.

I Want to Sell My Mission Bay Property. When Do I Sell?

Do not sell yet!

We have been spending a lot of time thinking about when is the best time to sell to fully take advantage of the price recovery in Mission Bay in 2021. Please feel free to reach out to me at deniz@atlasa.com and I can share my thoughts with you.